Contracts, Marriage, and The State

An under-the-radar Supreme Court Decision, handed down a couple days ago, offers another “be careful what you wish for” lesson to those who support government involvement in our individual interactions.

The case, Sveen Et Al. v. Melin, centers on a state law in Minnesota that automatically removes life insurance beneficiary status from a spouse upon divorce. Mark Sveen married Kay Melin, designated her beneficiary of his life insurance, with his two children as contingents, then divorced Melin. He did not change his insurance designation, neither in the divorce decree or subsequently. Sveen died 4 years later, and his ex wife and children went to court over the insurance proceeds.

The referenced Minnesota law did not exist when the policy was purchased, but was instead enacted afterwards. The children argued that the law applied retroactively, and Melin’s side argued her case based on the Contracts Clause:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

A plain reading suggests that the Minnesota law violates both the ex post facto part and the impairment part, but the Court ruled 8-1 to uphold the law anyway. The Court’s rationale is based on the nuance of “substantial impairment,” and does some handwaving regarding inattentiveness. You can read it here. The lone dissent, by Gorsuch, centers on the retroactive aspect of the law. The laws in effect at the time of the policy’s purchase should be the basis of the ruling in this case, which is how the Eighth Circuit ruled before being overturned by SCOTUS. Forbes deconstructs the decision a bit further.

I’m inclined to agree with Gorsuch here, but I’d take it a step further. What is at play here is the inevitable fallout of the continued acceptance of the government as a manager of and party to marriage contracts. As I argued years ago, it is this involvement that made gay marriage a controversy. Without government’s involvement, marriage and all its terms, rights, and obligations would be a strictly private contractual matter that didn’t affect anyone other than the spouses.

In an analogue to the old adage “he who pays the piper calls the tunes,” we witness, again, how bringing the State into what has long been and should be a non-State matter puts the State’s decisions ahead of those in the marriage, and creates other problems. Many, unfortunately, get selective in their support or dissent when it comes to State involvement, based on whether it works in their favor or not. The oft-heard argument is that the State serves to protect the “weaker” members of society. That ideal is routinely trotted out even in the face of stark evidence of State failure, with an unspoken and unsubstantiated presumption that the alternative is assuredly much worse. In this particular instance, however, the “weaker” side, presumably the wife (the State’s marriage rules have been structured to heavily favor women), argued (via a dozen women’s rights groups filing an amicus) for the upholding of the contracts argument (expectedly, they favored the wife over the kids).

All this boils matters down to the same conclusion: when the State involves itself in what should be private contracts, people will work that involvement to their personal benefit, and those who are better at doing so will come out ahead.

What’s better for society? Politicians and bureaucrats deciding how things should be, or individuals figuring out what’s best for themselves and what best reflects their wishes, desires, and intents? Mark Sveen may have intended that his ex wife be beneficiary of his insurance, even after divorce, or he may not have. Either way, that should be up to him, not up to a government that changed the rules of the game after he bought his policy.

In witnessing the Court rule as it did, we witness Government superseding private individual decisions. Sure, some will argue that Sveen could have simply acted at any time during the four years after his divorce to validate his wishes. But, why should he have to?

More broadly, the whole premise of the State as a third party in the marriage contract is one that we really should revisit. Yes, the fact of marriage is now deeply intertwined with the government, in particular regarding taxation, insurances, benefits, estates, and other fiscal matters, but the mere fact of that doesn’t justify the intertwining or mean it must persist. The gay marriage debate may be “over,” but there will come a time when a new variation on the controversy arises, and we’ll again see how there’d be nothing to argue about absent government meddling.

I am twice-retired, a former rocket engineer and a former small business owner. At the very least, it makes for interesting party conversation. I'm also a life-long libertarian, I engage in an expanse of entertainments, and I squabble for sport.

Nowadays, I spend a good bit of my time arguing politics and editing this website.